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Ron and Rand Paul Introduce Audit the Fed Legislation

With longtime Federal Reserve critic Rep. Ron Paul (R-TX) the chairman of the House Subcommittee on Domestic Monetary Policy and Sen. Rand Paul (R-KY) willing to lead the fight in the Senate, this is our best opportunity to pass a real Audit of the Fed. On Wednesday, the father and son duo introduced companion legislation, H.R. 459 and S.202, in both congressional chambers to require a full and thorough audit of the Federal Reserve. In the last congressional session, Ron Paul’s Federal Reserve Act of 2009 gained a bipartisan group of 320 cosponsors. With an increased number of freedom fighters in both chambers, it has a better chance of passing this time around.

Since its inception in 1913, the Fed has never been audited. It has always operated under a certain veil of secrecy. For decades, few people have questioned the legitimacy of the Federal Reserve. The current economic crisis has changed everything. All of the sudden, grassroots activists across the nation are demanding transparency at the Fed. Without a comprehensive audit, the American people will never know how the Fed is manipulating our money behind closed doors.

One thing is clear: nearly all of our original Founding Fathers would be appalled at the power given to the central banking system. Fierce opposition arose to the concept of the Fed’s predecessor, The Bank of The United States. In 1791, Jefferson wrote a letter to George Washington stating that the contents of the bill to incorporate the Bank of the United States “have not, in my opinion, been delegated to the United States by the Constitution.” The powers of the Federal Reserve far exceed the first Bank of the United States.

He was joined in opposition by notable Founding Fathers such as James Madison and Thomas Paine. In Common Sense, Thomas Paine writes “as to assume authority of any assembly in making paper money, or paper of any kind, a legal tender, or in other language, a compulsive payment, it is a most presumption attempt at arbitrary power. There can be no such power in a republican government: the people have no freedom—and property no security—where this practice can be acted.” If such a system runs contrary to our founding principles, it’s a shame that we have turned our backs on the actions of the Fed for so long.

It is crucial to end the secrecy of the Fed. Rep. Ron Paul says that this is a necessary step to “stopping the business cycle, ending inflation, building prosperity for all Americans, and putting an end to the corrupt collaboration between government and banks that virtually defines the operations of public policy in the post-meltdown area.”

The Fed's loose monetary policy is largely to blame for the current economic meltdown. Inevitably, the long period of unsustainable negative real interest rates gave individuals a tempting incentive to borrow from the banking system. Unfortunately, the artificially low interest rate misled millions of people to take out loans that they could not afford to pay back once the interest rates eventually rose. Government-established central banks tampering with the market provoked an artificial boom followed by the current inescapable bust or crash. We still haven't recovered from the recession that officially began in December 2007.

We often hear horror stories of currency collapse in foreign countries. Just a few years ago, citizens in Zimbabwe walked around with wheelbarrows full of cash. With an annual inflation rate of 89.7 sextillion percent, the wheelbarrow was worth more than their pile of practically worthless cash. In the Weimar Republic of Germany, people used their worthless paper money as fuel to heat their homes. We are not immune to such disaster.

Our dollar has lost 97 percent of its value since the creation of the Fed. Many of us may not often think about who controls the value of our dollar but we ought to. We have trusted the secretive Federal Reserve with a monopoly on our money. History shows us that entire civilizations have risen and fallen based on the value of their currency. With sound money crucial to our future prosperity, we must push for an audit of the Fed to expose how the Fed is manipulating our money supply behind closed doors.

Over the past several years, there has been a move to make college campuses an ideological bubble where only preferred and pre-approved perspectives are allowed, known as “safe spaces.” It seems this line of thinking is not only on college campuses as some of our politicians have been calling for that as well. Most recently, Chairwoman of the Federal Reserve Janet Yellen openly suggested turning the Federal Reserve into a safe space.

On behalf of FreedomWorks’ activist community, I urge you to contact your senators and urge them to cosponsor the Federal Reserve Transparency Act, S. 16, introduced by Sen. Rand Paul (R-Ky.). This important piece of legislation would require a full audit of the Federal Reserve by the Government Accountability Office. FreedomWorks has already released a letter of support for the House version of the Federal Reserve Transparency Act, H.R. 24, introduced by Rep. Thomas Massie (R-Ky.).

On behalf of FreedomWorks’ activist community, I urge you to contact your representative and urge him or her to cosponsor the Federal Reserve Transparency Act of 2017, H.R. 24, introduced by Rep. Thomas Massie (R-Ky.). The Federal Reserve Transparency Act, which already boasts 44 cosponsors, would require a full audit of the Federal Reserve by the Government Accountability Office.

FreedomWorks has chosen H.R. 24, the Federal Reserve Transparency Act of 2015, introduced by Rep. Thomas Massie (R-Ky.), as the bill of the month for November 2016. More commonly known as Audit the Fed, this legislation would force an audit of the Federal Reserve System (the Fed). For years, the activities of the Fed have been shrouded in secrecy, even though it has extensive powers. The Audit the Fed bill would help get the American taxpayers some answers about how the entity conducts its business.

The hardest part of drafting any new regulation is establishing a definition. In fact, most of the policy work is in the definition and there are alarmingly few policy considerations after something is defined as a covered entity. The definition of cryptocurrency has already proved problematic for regulators. Essentially, to commodities regulators, virtual currency is a commodity. For bank regulators, it is a bank. For securities regulators, it is a security. For those who regulate money transmitters, it is a money transmitter. For the purpose of property taxes, it is a property. Everyone wants a stake in the new world of virtual currency.

Last month's proposed rule on Incentive-Based Pay, the "London-Whale Sized Regulation," is open for comment until July 22. This proposal carries large implications for financial sector operations and also represents a overall trend in Dodd-Frank regulations.

Ahead of a vote on the Federal Reserve Transparency Act (H.R. 24), introduced by Rep. Thomas Massie (R-Ky.), in the House Oversight and Government Reform Committee, FreedomWorks CEO Adam Brandon commented:

As one of our over 6.9 million FreedomWorks activists nationwide, I urge you to contact your Senators and ask them to vote YES on the Federal Reserve Transparency Act of 2015, S. 2232. This bill would eliminate the current audit restrictions placed on the Government Accountability Office (GAO) and require a full and thorough audit of the Federal Reserve.

On January 12, the Federal Reserve Transparency Act (S. 2232) is scheduled for a vote in the Senate. Authorizing review by the Governmental Accountability Office of our nation’s monetary policy, the bill was introduced by Sen. Rand Paul (R-Ky.). But the bill’s final vote is arguably due to the legacy of the Senator’s father, former Rep. Ron Paul (R-Tex.), who championed the causes of sound money and central bank transparency over his 12-term career in Congress. Dr. Paul is the subject of this week’s Profiles in Liberty.